Name of the Project
Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP).

Location
South Africa.

Project Owner/s
Department of Mineral Resources and Energy (DMRE).

Project Description
The RMIPPPP, also known as the ‘emergency’ procurement round, is a response to the short-term electricity supply gap identified in the Integrated Resource Plan 2019.

The objective of the RMIPPPP is to not only alleviate the current electricity supply constraints but also reduce the use of diesel-based peaking electrical generators.

The programme aims to procure 2 000 MW from a range of energy sources and technologies.

The DMRE issued a request for proposal for the RMIPPPP in August 2020.

Mineral Resources and Energy Minister Gwede Mantashe released the names of the eight preferred bidders on March 18, 2021:

• the 150 MW ACWA Power Project DAO – a hybrid facility comprising solar photovoltaic (PV) and a battery energy storage system (BESS);
• a 450 MW Karpowership SA Coega facility – a gas-to-power plant based on imported liquefied natural gas (LNG);
• the 450 MW Karpowership SA Richards Bay facility – a gas-to-power plant based on imported LNG;
• a 320 MW Karpowership SA Saldanha facility – a gas-to-power plant based on imported LNG;
• the 198 MW Mulilo Total Coega facility – a hybrid plant employing solar PV and imported LNG;
• the 75 MW Mulilo Total hydra storage project – a hybrid facility comprising solar PV and a BESS;
• the 128 MW Oya Energy hybrid facility – a hybrid facility comprising solar PV, wind and a BESS; and
• the 75 MW Umoyilanga Energy – a hybrid facility comprising solar PV, wind and a BESS.

In June 2021, the DMRE announced the appointment of three additional preferred bidder projects following the completion of “value for money” negotiations with Norwegian renewables power producer Scatec.

The Scatec projects will comprise three hybrid plants with solar PV technology and BESSs, in the Northern Cape.

To meet the dispatchable profile demanded under the RMIPPPP, the three projects – Kenhardt 1, Kenhardt 2 and Kenhardt 3 – will together produce 540 MW solar and 225 MW/1 140 MWh battery storage.

Scatec has indicated that the projects are the only ones selected under the RMIPPPP that rely exclusively on renewable energy, making the three-project portfolio arguably one of the biggest single-site solar-storage hybrids in the world.

The projects will include average local content of 50% during construction, South African entity participation of 51% and black ownership of 41%.

Potential Job Creation
Not stated.

Capital Expenditure
The combined investment value of the initial eight projects is estimated at R45-billion.

Planned Start/End Date
The initial eight projects were expected to reach financial close by no later than the end of July 2021 and be connected to the grid from August 2022.

Latest Developments
For three years, gas-to-power supplier Karpowership SA has been subjected to multiple allegations about its proposed projects.

Turkish parent company Karpowership has long been ready to supply 1.2 GW of power to South Africa using ship-mounted gas-to-power plants; however, a series of lawsuits and complaints by environmental groups and rival bidders have continued to hamper its efforts.

The company has, therefore, decided to address shareholders following the latest blow to its efforts – with the Department of Forestry, Fisheries and the Environment (DFFE) having suspended a secondary environmental-impact assessment (EIA) on the planned 450 MW gas-to-power project, or “powership”, at the Port of Ngqura.

While Mantashe supports the projects, Forestry, Fisheries and the Environment Minister Barbara Creecy has taken a more cautious approach and says environmental concerns should not be disregarded in addressing the power crisis.

Karpowership SA has commented that it is disappointed at the DFFE’s decision to deny the latest EIA on the project, mainly because the company has been diligent and transparent in ensuring that all its projects meet the environmental requirements outlined by the law.

Karpowership SA undertook an enhanced EIA across all three proposed gas-to-power sites, which resulted in more than 1 300 community members being consulted in a series of hearings.

During six hearings, more than 30 independent economists, scientists and engineers presented findings to the public that the projects would have minimal adverse impacts on the environment, while they can significantly boost the economy and generate thousands of jobs and investment opportunities.

Meanwhile, in terms of the planned 450 MW Richards Bay gas-to-power project, Karpowership says it became aware of an administrative error regarding the public participation process for the site and, as a result, decided to withdraw its environmental application on March 2 to resolve the compliance issue before resubmitting.

The company has explained that the REIPPPP is a comprehensive and complex process, which has required a significant amount of administrative work to ensure delivery across the three separate sites of Karpowership SA.

The company has assured that it is working on the error and will resubmit the environmental application soonest.

Karpowership SA has said its EIA for the 350 MW Saldanha Bay powership project has also been suspended, owing to “an eleventh-hour complaint” by environmental nonprofit organisation The Green Connection.

The organisation alleges that Karpowership SA used the views of commercial fishing companies and aquaculture operators to represent those of smaller operators.

Karpowership SA, through its consultant Triplo4 Sustainable Solutions, has to respond to these allegations by March 17.

The company has affirmed that it actively sought to engage with Green Connection constructively in December 2022, having invited the organisation to highlight any third party, which may have inadvertently been left out of the engagement process.

“Unfortunately, the organisation did not extend the same courtesy to us,” Karpowership SA has indicated.

It has said that it remains cooperative with all authorities and committed to ensuring that all its proposed projects meet the country’s strict environmental protection standards.

Key Contracts, Suppliers and Consultants
None stated.

Contact Details for Project Information
DMRE, Natie Shabangu, email natie.shabangu@dmre.gov.za; or Thandiwe Maimane, email thandiwe.maimane@dmre.gov.za.